Air India Express’s long-term growth plan placed on hold: CEO

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Mumbai: Air India Express, the low-fare international subsidiary of the national carrier, expects to clock its third annual profit in a row of over Rs200 crore in 2017-18. At a time when the government is considering divesting its stake in Air India and its subsidiaries, Air India Express with 23 Boeing 737 planes plans to expand its network to even more domestic and international destinations. Air India Express will also evaluate the government’s recent proposal to connect state capitals with nearby international destinations, its chief executive Krishnamurthi Shyamsundar said in a telephonic interview. Edited excerpts.

How do you plan to expand your fleet?

Air India Express has a fleet of 23 B737-800 NG aircraft, which includes six aircraft taken on dry lease during 2016-17.

The airline has firmed up the lease of two more B737-800 NG aircraft in FY 18-19. These aircraft are expected to join the fleet in September and October, respectively.

Which new destinations does the airline plan to connect in the coming months?

During 2017-18, Air India Express commenced operations on several new domestic and international routes—Delhi-Coimbatore; Delhi-Madurai; Mumbai-Vijayawada; Kochi-Doha; Coimbatore-Singapore; Madurai–Singapore.

In the summer schedule (2018), the airline has increased the frequency of flights on Madurai-Singapore (from four a week to daily flights); Kochi-Doha (from four a week to daily flights). The airline plans to commence thrice-weekly services on the Kochi-Surat sector. Once the Surat airport is notified as an international port, the airline will commence thrice weekly direct flights between Surat and Sharjah.

When the Kannur airport is ready for international operations, Air India Express will launch several direct services from Kannur to potential destinations in the Gulf countries.

What’s the revenue/profit Air India Express is expected to report during 2017-18?

The provisional estimates of revenue and profit for 2018-19 are Rs3,575 crore and Rs225 crore, respectively. This would make it thrice in a row of net profit for the airline.

Would the airline be interested in participating in the government’s proposed plan popularly termed as ‘UDAN (Ude Desh ka Aam Naagrik) International’ which plans to connect tier-II and tier-III towns with close-by international destinations?

Air India Express has been a niche player from its inception. The airline’s network strategy and business plan have centered around connecting tier-II cities in India to destinations in the Gulf/South-East Asia. If there are other such potential cities/capitals that states identify—within the operating capabilities of Air India Express’s fleet, which would also need VGF (viability gap funding) support—the airline would be happy to evaluate the proposals.

What’s your vision for Air India Express at a time when the airline is likely to go into private hands?

As CEO of Air India Express, my job is clearly cut out. It is to ensure that the airline continues to achieve high levels of efficiency and productivity in all operational and administrative areas so that we are in a position to offer convenient, comfortable and value-for-money services to our esteemed customers and, thereby, increase our profitability. At this juncture, the vision has to be on these lines.

A year ago, the airline had in place long-term plan (to achieve growth). With divestment looming, what’s the fate of this plan?

Yes; a long-term plan for the airline’s fleet and network was developed. The plan had also been approved by the airline’s board. Obviously, under the current circumstance, it has been placed on hold.livemint